Baird Downgrades McKesson Outlook; Analysts See 25.92% Upside

In a recent report, Baird has downgraded McKesson's stock outlook from Outperform to Neutral. Despite this downgrade, analysts project a potential upside of 25.92% based on the average one-year price target, though expected revenue is set for a decrease of 2.60%.

Date: 25-09-2024

AI Rating: 5

The report details a downgrade from Baird for McKesson, shifting their outlook from Outperform to Neutral. This signifies a cautious approach to the stock, which could lead to investor hesitation and affect stock prices negatively in the short term.

Despite this downgrade, analysts forecast a 25.92% upside based on an average one-year price target of 643.24 GBX, ranging from a low of 577.22 GBX to a high of 706.41 GBX. This projection may entice some investors looking for growth potential, suggesting that there is still optimism around the stock despite the downgrade.

On the revenue front, McKesson’s projected annual revenue is 305,609MM, but this is expected to see a decrease of 2.60%. This decline in revenue may indicate underlying challenges the company is facing, which could pressure stock prices lower as investor confidence wanes.

The report also mentions the projected non-GAAP EPS at 30.06. A decrease in revenue may also impact the earnings delivery, but without precise prior EPS data from the report, the extent of the impact cannot be determined.

Another positive note from the report is the increase in fund sentiment, with a reported 2,684 funds or institutions holding positions in McKesson, marking a 3.71% increase in institutional ownership. This indicates a level of confidence from larger institutional investors despite the downgrade, which may help stabilize the stock price amidst the negative news.

The reported actions of significant holders, such as Massachusetts Financial Services decreasing their stake and Jpmorgan Chase increasing theirs, can signal mixed sentiments within large holders which might influence market reactions. The overall portfolio allocations by institutions fluctuating could further contribute to stock volatility.

Overall, while McKesson's downgrade and decreasing revenue outlook could suggest a tough period ahead, the analyst upside projection and stable institutional holdings may provide some cushion against significant declines.

Stocks: MCK